With the continuous fall in the rate of interest by various bank deposit schemes and the unavailability of any other deposit options in the market; in recent years, mutual funds have become an increasingly popular investment tool.
Mutual funds, today, are also one of the first choice investment options for all the new investors. These investors are attracted to key marketing terms like ‘High-returns.’ However, with high-returns come ‘High-risks’. And thereby gives rise to a number of questions.
How can SIP mutual funds help you save your financial assets and investment? What are debt mutual funds? And why is it an excellent option for new investors? Are you eager to find answers to these questions, then we have listed them in this article.
What are Debt Mutual Funds?
Debt mutual funds are associated with consistent returns; hence they are the first choice option for all new investors. Equity mutual funds are related to equity instruments. On the other hand, debt mutual funds are made in bonds and treasury bills. Most people invest in debt mutual funds from their monthly income and savings. What makes debt mutual funds special is it offers low returns and low risks, and it is a great option for all the new investors who don’t want to risk their hard-earned money. Here are some of the main reasons why you should invest in debt mutual funds.
Debt-Mutual Funds Have Short Growth Rate:
If you don’t have enough funds or you are financially weak at this point of time, then debt mutual funds is a must invest option as it can help you during emergencies. Unfortunately, bad times can havoc anyone; hence it is essential to prepare yourself to reduce the financial impact. Debt mutual funds have a short maturity rate; hence you can quickly withdraw and use the funds. One of the best advantages of debt-mutual funds is you are not penalized when you exit before maturation.
Debt-Mutual Funds Accelerate Short-Term Financial Goals:
As mentioned above, debt mutual funds have short maturity growth; hence it is a great option for all people who want to invest money for 12-24 months.
Low-Risk And Profitable Returns:
There is no doubt that your debt mutual funds offer low returns, but they are profitable. Leaving returns and profits aside, debt mutual funds are also popular for offering low-risk environments.
Debt Mutual Funds Are Versatile In Nature:
These funds are from fixed income securities; hence you can invest through SIP or systematic investment planning. Investing in debt mutual funds is also too easy as you don’t need any professional help. You can directly transfer the fund from your bank account to your debt mutual fund account. Apart from easy deposit and withdrawal, you can also modify your monthly SIP by accessing your income.
Debt mutual funds are an ideal investment option for all investors who like short-term investing and to be on the safer side.